US Revokes License for Trinidad and Tobago to Explore Venezuelan Gas Field

Introduction to the Issue

PORT OF SPAIN, Trinidad, CMC – The Energy Chamber of Trinidad & Tobago (ECTT) has described as “disappointing” but “not unexpected” the announcement by the United States that it was revoking the Office of Foreign Assets Control (OFAC) license that had been granted to Trinidad and Tobago to allow Shell, the National Gas Company (NGC) and contractors to explore, produce, and export natural gas from the Venezuelan Dragon Gas Field.

In a statement, the chamber noted the news that Washington had revoked the two OFAC special licenses for the Dragon and Cocuina fields.

“This is disappointing news, but not unexpected given the previous cancellation of other general and special licenses for companies working in Venezuela.”

Background and Context

The license was valid until October 31, 2025, and enabled Trinidad and Tobago to pay for gas in various currencies and through humanitarian measures. On December 21, 2023, Trinidad and Tobago also secured a 30-year exploration and production license from the government of Venezuela for the Dragon gas field.

Washington has also revoked the Cocuina-Manakin license granted to Port of Spain on May 31, 2024.

Government Response

Prime Minister Stuart Young told a news conference on Tuesday that he had received communication from the relevant US authorities on the issue and that Port of Spain had been given a winding down period until May 27 this year.

“What I can tell Trinidad and Tobago is that we have now been informed that our license from OFAC, which is dated 18th December 2023, has been revoked by OFAC and the Cocuina-Manakin license.

“But I can tell Trinidad and Tobago, I have few details. I have been in touch with our attorneys at law in Washington, DC. I won’t say there is a process for appeal of this revocation, but there is a process for you to make an application for it not to be or for there to be amendments.

“We are going to be engaging in that process on behalf of Trinidad and Tobago,” Young said, adding that he had also “reached out” to the US Special Envoy for Latin America and the Caribbean, Mauricio Claver-Carone, and put in a request for a telephone conversation with the US Secretary of State Marco Rubio, “all of which I expect us to have the opportunity for me once again on behalf of Trinidad and Tobago to present our case.”

Energy Chamber’s Statement

The Energy Chamber said that importing pipeline gas from Venezuela for processing and onward sales to international markets as either Liquid natural gas (LNG) or petrochemicals remains a significant economic opportunity for Trinidad and Tobago.

“It is essential that the government of Trinidad & Tobago continues to engage actively with both the government of the United States and Venezuela to find a mechanism to pursue this opportunity.

“Simultaneously, there are significant opportunities to develop natural gas fields within Trinidad and Tobago’s exclusive economic zone, and these must also be pursued actively and urgently.”

Opposition’s Reaction

Meanwhile, the main opposition, the United Nations Congress (UNC), which is campaigning for the April 28 general election, said the government had been warned about the project.

“We told the government that they had to do things properly with these licenses and the new Trump administration,” said the former leader of the Opposition Business in Parliament, David Lee.

He told the NEWSDAY newspaper that the opposition had warned the government against “placing all their eggs in one basket with (Venezuelan president Nicolas) Maduro.”

“They should have – and I keep repeating it once more – for the last ten years, this government should have been incentivizing energy companies in Trinidad to continue drilling and exploring within our territorial waters.

“The Opposition kept saying we have no problem if you get gas from Venezuela, but not at the expense of jeopardizing our exploration and drilling in our territorial waters. “So we are not surprised. We told this government that this could happen. We told this government that a new (American) administration is a different ball game,” he added.

Conclusion

The revocation of the OFAC license is a significant setback for Trinidad and Tobago’s energy sector, but the government and the Energy Chamber are exploring alternative options to pursue the economic opportunity of importing pipeline gas from Venezuela. The opposition has criticized the government’s handling of the project, but the government is engaging with the US and Venezuelan authorities to find a mechanism to move forward.

Frequently Asked Questions

What is the OFAC license and why is it important?

The OFAC license is a special permit granted by the US government to allow companies to work in Venezuela despite sanctions. It is essential for Trinidad and Tobago to explore and produce natural gas from the Venezuelan Dragon Gas Field.

What are the implications of the license revocation?

The revocation of the license means that Trinidad and Tobago can no longer pay for gas from Venezuela in various currencies and through humanitarian measures. It also affects the country’s ability to export natural gas from the Dragon Gas Field.

What is the government’s plan to address the issue?

The government is engaging with the US and Venezuelan authorities to find a mechanism to pursue the economic opportunity of importing pipeline gas from Venezuela. The Energy Chamber is also exploring alternative options to develop natural gas fields within Trinidad and Tobago’s exclusive economic zone.